The European gas price has risen more than 10% in the past week, the highest level this year. The gas price is now more than 40 euros per megawatt hour. Although this is a hefty increase, fortunately the price of gas is still much lower than during the energy crisis in 2022, when the price of gas was a whopping 300 euros!
This increase is mainly caused by the war between Russia and Ukraine. With supply from Russia uncertain, Europe is deploying more liquefied gas, or LNG. LNG prices fluctuate widely because major global energy suppliers trade in this market on a daily basis.
Demand is also rising for gas, not for heating, but for electricity generation, including for cooling. This partly due to heat waves in southern Europe and Asia. In addition, some countries, such as Austria and Ukraine, still receive Russian gas via pipelines through Ukraine. Currently, there is fighting near the Russian border town of Sudzja, where a major pipeline is located.
The higher gas price on the wholesale market does not directly mean higher costs for companies. Companies with fixed contracts only notice the price increase when their contracts are renewed, while those with variable contracts usually get adjusted rates every quarter or six months. However, companies with dynamic contracts pay the daily price for gas and therefore now pay more.
Purchasing collective EAB Excellent
At EAB Excellent, we have our own purchasing collective. Collective purchasing involves organising joint purchasing actions, where we negotiate with energy suppliers on behalf of our customers. By combining purchasing power, we can achieve attractive terms and rates. This gives our customers the advantage of not feeling much of this price increase in the gas market.
Wondering if your company’s energy bill can also be reduced? Simply upload your annual statements here, and we will search for a more competitive energy tariff for you. If we find a better offer, we will arrange the entire procurement process. That way, you can focus on what really matters, while we ensure the best rates!
